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Mikhail Blekherov – President, CRC-Evans Onshore East – Netherlands

28.07.2015 / Energyboardroom

Mikhail Blekherov discusses CRC-Evans’ new fit-for-purpose facility in the Netherlands that the company is building into a center for excellence for its Onshore East division, and the international reach of the Netherlands office in geographies as varied as Russia, China, Algeria and Turkey. 

Please give an overview of where the company stands today, and what the focus of your current leadership directives are as president?

The structure of CRC-Evans is divided into four channels: Onshore West, Onshore East, Offshore, and Inspection. Onshore West is based in Houston, TX, covering our business in the Americas and Canada. Onshore East is based here in Zeewolde, Netherlands, which covers all onshore activities in the Eastern Hemisphere. Based in Alness, UK, the offshore division encompasses all worldwide activities dealing with offshore. The purpose of the Dutch facility is to consolidate our operations in the Eastern Hemisphere, acting as a Center of Excellence built for purpose about one year ago, with satellite offices in regions such as the Middle East, Australia, and Asia. Although there is an absence of projects in the Netherlands, we’re heavily involved in several other key locations such as Turkey for the Trans-Anatolian gas pipeline (TANAP), France for GDF Suez work, Australia for APLNG and QCLNG, as well as other countries with massive infrastructure investments such as Saudi Arabia, Algeria, Russia, and China. Despite the lack of local business development opportunities, the Netherlands serves as the core of our Onshore East operations with functions such as refurbishment, financial and logistical support, and sales teams catering to the global landscape.

Our business is quite cyclical. There are pipeline projects around the world that are driven not only by economical reasons but also, to a large extent, political developments. So, we’ve had to adopt a very flexible approach over the years. For example, Russia, although historically a huge market for us, is now declining. Along the same lines, Algeria and Saudi Arabia have both unsuspectingly become key growth drivers in the company’s overall portfolio. As president, my role is making sure we smooth out all the bumps in our business by streamlining operations, maximizing flexibility, and finding and evaluating every business opportunity present in our region, which has to been quite a challenge in and of itself with the presence of growing cross-border tensions stemming from places like Russia and Ukraine.

What were the initial aspirations in establishing the Onshore East headquarters here in the Netherlands? What significance does it hold in terms of resources, capabilities, and strategy?

We’ve been operating out of the Netherlands for the past 30 years, but our presence has significantly evolved from the solely sales-centric operation that was initially established. In terms of the operating environment, the country boasts favorable characteristics such as accommodating tax regimes, efficient logistics network, and customs-friendly borders. Given the regional accessibility of the country, basing our customs bonded warehouse in the Netherlands has allowed us to more efficiently deploy our rental fleet around the world. When considering all these features, choosing to base our Onshore East headquarters here in the Netherlands was a purely logical decision. Now operating on a completely different scale, our operations here have been very much focused on building up our supply chain in Europe, as well as the broader Eastern Hemisphere, to ultimately strengthen the company’s global footprint.

For over 80 years, CRC-Evans has been involved in virtually every aspect of pipeline construction. How has the company’s focus shifted over the years? What are the most pervasive demands across the industry today?

Traditionally, our portfolio has been significantly comprised of Canada and US related business, but we’ve already started to see that dynamic shift heavily from the mid 2000s. In recent years, we’ve seen an influx of China and Russia related business. Regarding Russia, we’re experiencing a relatively turbulent cycle considering the country’s recent economic downturn and imposition of foreign geopolitical sanctions. That being said, however, the amount of onshore construction in Russia is unparalleled. Every year, thousands of kilometers of large diameter pipelines are installed. The same story applies with China. The country’s insatiable appetite for energy has only intensified in parallel with the country’s rapid growth and economic expansion—resulting in multi-phased projects such as the pipeline links from Turkmenistan and Kazakhstan to China and the four domestic West-East pipelines, all spanning 4,000+ kilometers. We’ve also established a strategic partnership agreement with China Petroleum Pipeline Bureau (CPP), which has further fueled our business development initiatives in this particular region. The largest onshore project that we’ve ever undertaken, TANAP, where we’ve secured the majority of work for automatic welding, field-joint coating, and the supply of pipeline equipment, has also helped widen the scope of our international presence.

Perhaps one of the biggest developments within CRC-Evans was our shift towards offshore activity, currently representing more than 40 percent of our business. Although the Zeewolde office is primarily focused within onshore, we provide continued support in terms of equipment refurbishment and logistics for our offshore counterparts in the UK. So, while CRC-Evans is divided into several channels, we still operate as one company.

Operating in an industry that is notorious for cost overruns and project delays, CRC-Evans has managed to secure a prominent track record of success. From a project development standpoint, how do you go about attracting and retaining a steady stream of clients?

Our market approach entails working quite a bit with pipeline owning companies promoting our products and services, as I believe we are truly positioned as the frontrunners in the industry in terms of pipeline welding and coating technology. So, we work with pipeline owning companies to promote our technical solutions and make sure the advantages of our technology are clearly represented in the specifications for welding and coating works. At the same time, participation in all sorts of conferences and various meetings with energy leaders typically give us an early indication of the upcoming types of projects in our region, allowing us to plan our operational strategies and allocate resources accordingly.

During the course of a project, we strive to minimize, if not completely eradicate, variations in orders. Through CRC-Evans’ Total Project Support™ (TPS™), a global infrastructure of engineering and support programs designed to maximize productivity and efficiency, we strive to provide our clients utmost standards in customer service, quality, and added-value solutions. As work unfolds, we help enhance every aspect of our clients’ projects with high-performance equipment, trained operating technicians, onsite advisors, technical support, and training programs. We also help minimalize downtime with a full backup equipment fleet, international service teams, and our own spare parts inventory. Should the need arise, a CRC-Evans onshore pipeline construction expert can be dispatched to the project site within 24 hours, anywhere in the world. We might not be the cheapest solution on the market, but at least, contractors can find incomparable value through the comprehensive nature of our services. Ultimately, we strive to be partners with our clients, not just a rental equipment supplier.

Stanley Black & Dekker is a longstanding global leader in industrial equipment and household hardware with unique growth platforms and a track record of sustainable profitable growth. What are the competitive advantages of being apart of such a globally diversified conglomerate?

Being a part of the Stanley Black & Dekker organization has tremendous influence from both an internal and external perspective. CRC-Evans was established as a cornerstone for the development of the Stanley Oil & Gas platform, which will eventually involve a further infusion of companies in the future. Having the backing of a 14 billion USD company creates its own set of competitive advantages. We’re able to more effectively weather the effects of short-term demand swings, while focusing on enhancing our long-term capabilities, such as the recent investment in our Zeewolde facility. Although we cannot always avoid cost-cutting initiatives, the idea is to preserve the core of the business and our ability to execute in the field. We’ve been able to do it for 80 years a private company, and now we’re apart of an even broader public organization, which will only further enable our ambitions.

With over 129 patents, CRC-Evans is clearly pushing the boundaries on the ‘Dutch innovative spirit’ within the pipeline industry. What type of R&D projects has the company undertaken to maintain that momentum?

Although our R&D division is centralized in Houston, TX, there are a number of initiatives throughout CRC-Evans. We’re always focused on implementing the latest technologies and adapting them to onshore needs. For example, the newest generation of our welding machines, P-625, boasts cutting-edge features for high production welding, especially with regards to data acquisition. We’ve started to see many pipeline owner companies seek data logging systems to complement their welding activities. The P-625’s bluetooth connectivity allows weld parameters to be programmed anywhere, then wirelessly downloaded to the machine in the field. Parameters such as volts, amps, travel speed, oscillation, and dwell times can now be adjusted in a seamless and efficient manner. The system also allows the user to store a real-time log of all essential weld data for further processing in a user-friendly Excel spreadsheet format—providing invaluable insight into a pipeline’s historical production and quality record, and promoting an unparalleled platform for process improvement. Dedicating a significant portion of our annual turnover to R&D, we’ve been able to provide the quickest and most reliable welding and coating solutions on the market—collectively helping our clients minimize operational costs, human involvement, and in turn, safety risks. If nothing else, our continued emphasis on value-added solutions embodies CRC-Evans’ fundamental mindset: “Leading Through Innovation.”

What type of policies or procedures has CRC-Evans implemented to display the company’s conviction towards integrating health and safety into its day-to-day operations?

There are several aspects of health and safety in our business—operations in the facilities. We’ve got strict policies on what we’re doing here in our production facilities and refurbishment activities, but more importantly in the field. It’s a heavy job involving heavy machinery, posing many physical risks for our workers. The technologies we use aim to reduce human involvement and simplify operations wherever possible. For example, the welding of tie-in joints in pipelines represent serious safety risks, considering that operators are sometimes trying to align two separate joints under significant stress and simultaneously performing the weld. There have been many accidents in the past in this particular area. As a result, CRC-Evans introduced new technology called DECKHAND® Pipe Handling System, in which hydraulically-driven arms supported by an excavator align the joints and hold them firmly in place while the welding is performed automatically without the involvement of a human operator. This is a breakthrough technology that we’re introducing in the US, and eventually in Europe. Bottom line, HSQE is a pervasive concern for all companies across the industry, and CRC-Evans is no different. We’ve made extensive efforts to showcase our dedication to the overall well being of our employees, and will continue to do so moving forward.

Perhaps the biggest asset and key component to the company’s continued success is its people. How does the company go about attracting and retaining the best talent available? What makes CRC-Evans the employer of choice?

I came to work for CRC-Evans 20 years ago. It’s not unusual in our company to have people working for 10 or more years. Our industry niche is quite unique. It’s a close circle of people dedicated to this particular sector with a certain mindset. Even here in the Netherlands we have a relatively small crew of 40 people, spanning a diverse spectrum of ethnicities including Dutch, Polish, Russian, and Australian. The variety in cultures and backgrounds has been embedded within the CRC-Evans culture since day one. We are an industry leader with a global spread of activities—offering many different types of international opportunities for our employees to develop a more globalized skillset. Especially for the younger generation, it’s an exciting business for people to travel the world and experience different types of cultures, while developing a career and witnessing major construction projects firsthand. Whether or not these individuals choose a different path or stay with CRC-Evans, it’s still a great start their professional lives.

What are a few of your proudest milestones or achievements since assuming the position of president?

We’ve obviously been involved in a number of projects. A notable one that comes to mind was for Sakhalin Energy, the largest project for us at the time, which took three years to complete. We supplied the majority of equipment for welding, and partially for field-joint coating, and pipeline construction. The magnitude of such a project was not something that was seen everyday. The sheer appropriation of land was quite impressive. There was no infrastructure when we started, so it was fascinating to see how the island evolved during the course of pipeline construction. The investments brought to that island had a material impact on the livelihood and standards of living for the local population. The project was lead by a very dynamic consortium of partners comprised of Saipem, Shell, and Sakhalin Energy. The operating company had an interesting mix of expats from France, the UK, and Russia. It was truly a melting pot of different cultures and technologies concentrated on this island, and proved to be a rather unique experience in which everyone was able to exchange best practice and promote knowledge sharing to complete the project in a timely and effective manner.

What are your ambitions for the next five years?

I remember when I came to work for the company 20 years ago, the president at the time told me that it’s not always fun, but it’s never boring—a memento that has held true till this day. Everyday there’s something new and the projects are always in different locations. Here in the Netherlands, now that we’ve established the center of excellence, we’re very much focused on scaling up the operations, building out supply chain networks, and localizing operations in countries such as Algeria, Saudi Arabia, and Turkey to further enhance our global spread. In the coming years, my priority as president will also focus on improve the fluidity of our satellite network to ensure the same unified standards in quality service for our customers, anywhere in the world.

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